Corn Commentary
March Corn closes ¼ cent lower ($3.53), July ¼ cent lower ($3.69 ½) and Dec ½ cent lower ($3.86)
January Chgo CBOT Ethanol closes 0.017 cents a gallon lower ($1.318), Feb 0.019 cents lower ($1.346)
Okay – this is not saying a whole lot as corn could not make a 3 cent range today – but – the flat price registers a 3 week high an could not sustain it as we finish fractionally easier on the day. It seemed like corn was the recipient of the short side on inter-market spreads. Wheat has the story with poor condition ratings, possible winter kill and the prospect of lower winter wheat acres. Soybeans have a minor story with parts of Argentina that have a dry bias (don’t be surprised to see the USDA lower soybean exports, once again). What’s corn’s story – my opinion – better domestic usage vs. the possibility of a higher domestic output (don’t see the USDA changing the exports at this time) – a smaller 2nd season Brazilian corn crop (won’t know more about this until later in the winter).
If the interior corn basis is not steady its higher. The New Year has yet to bring us any new producer selling. Is he waiting to see what the USDA has to say on the 12th? The Gulf market for corn appears to be staying in step with the processor as they vie for origination. Most Illinois River locations have a firm bias – the thought is that the River is going to freeze sooner vs. later so exporters would like to get something going downstream before it freezes over. Corn spreads ran fractionally mixed on the day; not really deviating from recent width.
Going forward the flat price is no worse than a consolidating type trade. A high volume of spec shorts is the best support. Resistance is still the idea of massive amounts of corn sitting over the market. Charts read higher but with the low volatility not much to the upside is expected until we see what the USDA has to say on the 12th.
Daily Support & Resistance for 01/04
March Corn: $3.51 – $3.56
July Corn: $3.66 ½ – $3.72 ½
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